CORDIS - EU research results

Development of a complete low cost Card Payment Acceptance Infrastructure

Periodic Reporting for period 1 - uCube2 (Development of a complete low cost Card Payment Acceptance Infrastructure)

Reporting period: 2016-03-01 to 2016-08-31

The objective of YouTransactor in this project was to propose a disruptive innovation in front of the mPOS model for micro merchants and traditional EFTPOS networks, addressing all size retailer market segment. This innovation called uCube2 aims to find the sweet spot between mPOS and EFTPOS business model:
- uCube2 will drastically reduce the cost of the Payment Card Acceptance service by proposing one price per transaction including the terminal and the infrastructure. Indeed, with a much lower cost of the payment solution means, banks will be able to build the business cases they need to facilitate credit card acceptance among small and medium merchants, opening up new opportunities in this market.
- uCube2 will propose a similar PoS experience than EFTPoS with a dedicated and robust payment terminal but which doesn’t need to pair with a smartphone and/or a tablet. The uCube2 solution has the ambition to address all size of professional merchants worldwide, including emergent countries. Acquiring banks that traditionally sell EFTPOS solution will consequently be willing to cross-sell uCube2 and thus they will expand their product portofolio for PoS market.

From a technological point of view, uCube2 project consisted in making the pre-studies of the core of the NanoPOS, the PCI PTS payment acceptance device, and its integration in a cost effective acceptance infrastructure based on cloud technologies. Beyond this technical key target, the project delivered a more detailed business-plan, supported by a deepened market study.
The objectives of the Proposal YouTransactor submitted to EC on February 2016 were to run several pre-studies preparing the realization of uCube 2 / NanoPOS which is a complete Low Cost Payment Acceptance infrastructure. The uCube 2 is a “MPOS like” device that does not need a Smart Phone and a Payment Gateway to offer Payment service to the Merchants.

The uCube2 H2020 SME Phase 1 project has totally succeeded in delivering a deep market survey and a technical feasibility of uCube 2.

Firstly, the market segmentation was refined and analyzed. This has lead YouTransactor’s to change their strategy for Payment Services and Products. The commercializing strategy will be consequently twofold:
• Addressed by partnering with cash register vendors and combining Payment Product with Cash register software.
• Addressed with a more conventional approach: acting as an Hardware Vendor to directly sell uCube 2 or selling through the Merchant aggregators in developed countries and through Banks in emerging countries.
This leads to a new business plan for the next five years that takes into account the market evolution.
Secondly, the functional specifications expected by end users depending on each submarket were defined. For example, the Payment Product could be integrated with a Restaurant Cash register system. We also realized some demonstrators and prepared a pilot with Tiller (leader in Cash Register system for Restaurants). This technical feasibility ended by pre-studies around the uCube 2 Product so as to finalize the design and to obtain EMV certifications.
Based on the results of the uCube2 H2020 SME Phase 1 project, YouTransactor is ready to start promoting and developing the products that will leverage the big changes in the Retail : Big Data, cross channel, Cash registers moving to Tablets and the Cloud, MPOS replacing EFTPOS in emerging countries. This strategy will go with the offer of a novel way to do Payment services that will be proposed at a lower cost than any of the existing solutions.
At YouTransactor company level, this feasibility study allowed to precise goals for the next development phase: technology, product development and go to market with a R&D investment that has been estimated to be higher than 2,5 Million Euros. In parallel of this development phase YouTransactor will start providing the payment service. We expect to create at least 6 positions to set up the service.
This program may ideally be supported in the frame of an H2020 SME Phase 2 project.